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Indonesia signals progress in deal to procure Su-35s

04 June 2019
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Indonesia wants to procure 11 Sukhoi Su-35 fighter aircraft from Russia for USD1.14 billion, with payment sourced through countertrade, technology transfers, as well as cash. Source: United Aircraft Corporation

Deliveries of Sukhoi Su-35 'Flanker-E' multirole combat aircraft from Russia could start before the end of the year, according to Indonesian Defence Minister Ryamizard Ryacudu.

Ryacudu was quoted by Russian news agency Tass as saying that he expects the Indonesian government to finalise its part of the transaction within the next few months. "I think that the issue will be solved this year," he said.

The Indonesian Ministry of Defence (MoD) did not confirm the schedule. However, Jane's understands that the Russian side of the Su-35 contract with Indonesia has already been agreed by Moscow, and that delays have partly been caused by Indonesia's presidential election, which was held in April, and negotiations within the Indonesian government about what commodities will be exported to Moscow as part of the deal.

In comments reported by Tass, Ryacudu said that "certain challenges [in finalising the deal] are due to the fact that three departments of the [government] are involved in the process". He said the MoD has agreed to the deal but that the Indonesian ministries for trade and finance "are still in the process of approval".

Ryacudu added that while "fundamentally the issue has been solved", various levels of approval are required because the Su-35 contract involves "various forms of payment".

Indonesian MoD officials have previously confirmed to Jane's that the Su-35 transaction consists of several elements consistent with Indonesia's Defence Industry Law - also called Law 16 - through which the government seeks to secure offset-like benefits linked to defence procurement.

The total value of the Su-35 contract, which features the supply of 11 aircraft, is USD1.14 billion.

Half of the contract's value, about USD570 million, is being financed through countertrade, with Indonesia expected to export to Russia a long list of commodities including palm oil, rubber, machinery, coffee, cocoa, textiles, tea, footwear, processed fish, furniture, copra, paper, and spices.

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